PAX Gold is the hybrid investment option bridging the gap between digital currencies and the gold market. This cryptocurrency provides the benefits of blockchain technology without the price volatility. The Pax Gold token also offers a more accessible way for traders to invest in physical gold assets.
What is PAX Gold?
PAX Gold (PAXG) is the biggest digital asset backed by underlying gold and each PAXG token represents one fine troy ounce of a 400-ounce London Good Delivery gold bar. The price of PAX Gold mimics the current gold market prices of gold, making it a more stable crypto investment with less volatility.
The crypto asset is issued by the Paxos Trust Company and the market value of the circulating supply is held in physical gold bars in vaults similar to how stablecoins hold reserves of the fiat currency they are pegged to.
To guarantee its integrity, the Paxos Trust Company undergoes and releases monthly audits to verify that its PAXG tokens are equal to the amount of allocated gold it holds. This process is regulated by the New York State Department of Financial Services.
Additionally, users have the option to redeem their PAXG tokens for allocated gold bullion bars whenever they desire, or for smaller amounts of unallocated gold bullion bars through a network of physical gold retailers around the world.
PAXG tokens are based on the ERC-20 token standard and provide users with all of the benefits of owning physical gold bars without the drawbacks typically associated with the physical commodities. These include limited accessibility, challenges storing the physical gold, difficulties transporting it, etc.
Due to its tokenized nature, PAXG can be traded for other cryptocurrencies in the sector, or simply redeemed for physical gold.
Who created the PAX Gold platform?
The Paxos Trust Company was co-founded by Charles Cascarilla and Rich Teo in 2012 with the aim to provide a more accessible and trustworthy means of moving assets. Cascarilla holds a degree in finance with experience in the capital management sector. He has also participated in multiple traditional and blockchain-based venture capital projects.
In 2018, the company released Paxos Standard (PAX), a stablecoin pegged to the US dollar, with reserves held in US bank accounts. In 2021, PAX rebranded to the Pax Dollar (USDP). The stablecoin remains one of the top 10 biggest asset-backed cryptocurrencies.
In 2019, PAX Gold (PAXG) was launched. The allocated gold-backed digital asset holds its reserves in vaults secured by Brinks. The company undergoes monthly audits which verify that the correct amount of reserves is held for each coin.
The company has achieved strong institutional support and secured more than $500 million in funding from reputable investors such as OakHC/FT, PayPal Ventures and Mithril Partners.
How does the PAX Gold work?
First and foremost, PAXG represents physical gold. PAX Gold (PAXG) is an ERC-20 token built on the Ethereum blockchain making it compatible with many dapps and decentralized exchanges within the DeFi space. When creating or destroying PAXG tokens, the company charges a small fee (0.02%) while the trader is liable for gas fees for any on-chain transactions.
Increasing investment entry barriers, the token is divisible by 18 decimal places, allowing anyone access to fractional ownership of a physical gold bar without the associated burdens of owning physical gold (transport, storage, etc).
Each PAXG token is allocated a unique serial number that matches that of an individual gold bar held in reserve. Holders are entitled to find the physical gold bar, its value, and other characteristics by using the PAXG lookup tool. Tokens can also be redeemed for gold, fiat currency, or other digital currencies as per the current market price of gold at that time.
PAXG transactions are closely monitored and surveyed by Paxos using third-party analytical tools for the purpose of investigating any potential cases of fraud or money laundering. In addition, developers subject the code to regular smart contract audits in order to detect bugs and vulnerabilities.
What is the PAXG token
PAX Gold (PAXG) is an ERC-20 token built on the Ethereum blockchain. Each PAXG token represents one fine troy ounce of a 400-ounce London Good Delivery gold bar which can be traced using the unique serial number.
The cryptocurrency offers investors exposure to the price of gold as well as investment opportunities otherwise difficult to access. The advantage of investing in cryptocurrencies like Pax Gold PAXG is that one can bypass the physical challenges of investing in real gold reserves. Instead, one can manage their investments from the convenience of their home.
The Paxos Trust Company holds all PAXG token reserves in vaults and undergoes monthly audits which are published on the Paxos Trust Company’s website.
If you're looking to invest in the long-term value of high-quality gold without concerning yourself with physical gold bars, with the added benefits of blockchain technology Gold PAXG tokens might be the answer you're looking for.